Summary of Significant Accounting Policies and New Accounting Guidance (Policies)

9 Months Ended

Sep. 30, 2015

Summary of Significant Accounting Policies and New Accounting Guidance [Abstract]

Recent Accounting Pronouncements

Recently Adopted Accounting Guidance

In May 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-08, “Business Combinations (Topic 805): Pushdown Accounting - Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115.” The amendments update various SEC paragraphs included in the Accounting Standards Codification (“ASC”) to reflect the issuance of Staff Accounting Bulletin (“SAB”) No. 115. SAB No. 115 rescinds portions of the interpretive guidance included in the SEC’s Staff Accounting Bulletins series and brings existing guidance into conformity with ASU No. 2014-17, “Business Combinations (Topic 805): Pushdown Accounting,” which provides an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. We have adopted the amendments in ASU 2015-08, effective May 8, 2015, as the amendments in the update are effective upon issuance. The adoption of this standard did not have an impact on our financial statements.

Recent Accounting Guidance Not Yet Adopted

In August 2015, the FASB issued ASU 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements.” The new standard clarifies the SEC staff’s position on debt issuance costs in connection with line of credit arrangements from ASU 2015-03. The SEC staff would not object to presenting debt issuance costs as an asset if they are incurred before a debt liability is recognized or if they are associated with revolving debt arrangements. The update is effective for fiscal years beginning after December 15, 2015, and requires retrospective application. Early adoption is permitted for financial statements that have not been previously issued. As of September 30, 2015, and December 31, 2014, we had $0.4 million and $0.5 million of debt issuance costs that will remain classified as an Other Asset on our balance sheets when we adopt the new standard on January 1, 2016.

In April 2015, the FASB issued ASU No. 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” The new standard provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new standard does not change the accounting for a customer’s accounting for service contracts. The new standard is effective for interim and annual reporting periods beginning after December 15, 2015. We are assessing the provisions of the new standard and have not determined the impact of the adoption of this standard on our financial statements.

In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” The new standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset, consistent with debt discounts. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update is effective for fiscal years beginning after December 15, 2015, and requires retrospective application. Early adoption is permitted for financial statements that have not been previously issued. As of September 30, 2015, and December 31, 2014, we had $1.7 million and$2.1 million of debt issuance costs that are currently classified as an Other Asset on our balance sheets. Under this new standard we would recognize these costs as a reduction of Debt when we adopt the new standard on January 1, 2016.

In May 2014, the FASB issued ASU 2014‑09, “Revenue from Contracts with Customers (Topic 606).” The new standard provides new criteria for recognizing revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. It also requires expanded disclosures to provide greater insight into both revenue that has been recognized and revenue that is expected to be recognized in the future from existing contracts. Quantitative and qualitative information will be provided about the significant judgments and changes in those judgments that management made to determine the revenue that is recorded. In August 2015, the FASB issued ASU 2015-14, “Deferral of the Effective Date,” which changed the effective date of ASU 2014-09 to be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted but not before annual periods beginning after the original effective date of December 15, 2016. We are assessing the provisions of the new standard and have not determined the impact of the adoption of this standard on our financial statements.

Reclassifications and Revisions

Reclassifications and Revisions

Certain amounts previously presented for prior periods have been reclassified to conform to current presentation as described further below.

We reclassified $1.0 million of current deferred revenue to accrued expenses and other current liabilities on our balance sheet as of December 31, 2014. This balance was settled in March 2015.

As we discussed in our Annual Report on Form 10-K for the year ended December 31, 2014, subsequent to the filing of our Form 10-Q for the three months ended September 30, 2014, we determined that certain transactions were misclassified in the Statements of Cash Flows for the nine months ended September 30, 2014. The misclassifications primarily related to the repayment of an acquisition holdback liability for our 2012 Name.com acquisition and the timing of cash received related to gains on gTLD auctions. For the nine months ended September 30, 2014, these classification errors resulted in an overstatement of cash outflows from operations by a total of $1.5 million; an overstatement of cash outflows from investing activities of $0.5 million; and an understatement of cash outflows from financing of $2.0 million. We assessed the materiality of the error on our previously issued quarterly financial statements in accordance with SAB No. 99, “Materiality,” and concluded that the error was not material to the financial statements taken as a whole. We revised our Statement of Cash Flows for the nine months ended September 30, 2014, to correct this error.